According to the National Association of REALTORS® (NAR), current statistics show that investors and international buyers account for almost 60-percent of all residential real estate cash sales. Forty-five percent of second-time home buyers are opting to purchase homes with cash as well, compared to only 6-percent of first-time home buyers.
Are there benefits to buying a home with cash versus financing? Absolutely.
Cash Streamlines Home Buying Process
The home buying process can be lengthy and full of additional expenses beyond the price of the home. Paying cash for your luxury home can actually streamline the process and save you money. A cash purchase means no money out to pay for a mortgage application and the other fees that accompany a real estate loan, which can run into the thousands. In addition, cash eliminates the mortgage lenders’ requirement of a property appraisal. However, a property appraisal often is recommended, even if paying cash.
Discount Potential Increases
Paying cash for a home has the potential for discounts like a lower list price because the seller knows cash can help expedite the process. Cash also increases the potential for the buyer to negotiate an extended closing period. This is especially helpful if you prefer to sell your current property first.
Cash Has Higher Potential to Win a Bidding War
On average, a seller is more likely to opt for the all-cash buyer when there are multiple offers on the property. A cash buyer simply is more attractive to the seller because the seller knows there won’t be any worries regarding a back-out due to loss of financing. The seller also knows that process will be more streamline without having to wait on paperwork and approvals from a lending institution.
The benefits to buying a home with cash are numerous. Cash buyers actually end up paying less for their homes over time because without a loan, there’s no money paid out for interest. In addition, when you pay cash for your home, you immediately begin to build equity in the property.
Contact us at Walt Danley Realty when you’re ready to purchase your new luxury home. Whether buying with cash or opting for a lender, we’re here to help you find your ideal home.